M/s ANANT ENTERPRISES, MUMBAI V. THE PR. CIT 20, MUMBAI

ITA 3582/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3631 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 24-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHIL KUMAR GUPTA
• Keywords: Revision of order; Assessment record; Onus to prove; Set aside
• Section: 43CA; 143(3); 142(1); 143(1); 143(2); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI M BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 3582/MUM/2019 ( ASSESSMENT YEARS: 2014-15 ) M/S. ANANT ENTERPRISES, SHOP NO. 4, MOHAN KUNJ, 68, JYOTIBA PHULE ROAD, DADAR (E), MUMBAI 400014 / VS. PR. CIT 20 364, 3 RD FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. ./ ./ PAN/GIR NO. : AARFA0822H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA, AR / RESPONDENT BY : SHRI SUSHIL KUMAR GUPTA, DR / DATE OF HEARING 05/02/2021 !'# / DATE OF PRONOUNCEMENT 03/05/2021 / O R D E R PER PAVAN KUMAR GADALE - JM: THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF PRINCIPLE COMMISSIONER OF INCOME TAX (PR. CIT)-20, MUMBAI PASSED U/S. 263 OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE HONBLE PRINCIPAL COMMISSIONER OF INCOME TA X HAD ERRED IN LAW AND FACT IN SETTING ASIDE THE ASSE SSMENT ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 2 - AND REFERRING BACK THE SAME TO THE LD. A.O TO CONDU CT A FRESH ASSESSMENT ON THE BASIS THAT THE ORDER PASSED U/S 143(3) OF THE ACT BY THE A.O IS DEEMED TO BE ERRONE OUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVE NUE. 2.THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND CARRYING ON BUSINESS AS BUILDE R AND DEVELOPER. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 30.11.2014 WITH TOTAL INCOME OF RS.1,06,030/-AND THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT, SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/SEC 143(2) AND 142(1) OF THE ACT ARE ISSUED. IN COMPLIANCE, THE LD . AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE DETAILS. THE A.O OBSERVED THAT THE ASSESS EE IS CARRYING ON BUSINESS AS BUILDER AND DEVELOPER A ND DURING THE SAID FINANCIAL YEAR THE ASSESSEE HAS DISCLOSED THE SALE OF SHOP AT KHARGAR PROJECT FOR R S. 50 LACS AND SALE OF FLATS AT KARJAT PROJECT FOR RS. 72.97 LACS. THE A.O HAS CONSIDERED THE SUBMISSIONS AND ACCEPTED THE INCOME AS PER THE RETURN OF INCOM E FILED AND PASSED THE ORDER U/S 143(3) OF THE ACT ON 26.12.2016 WITH THE TOTAL INCOME OF RS1,06,030/-. SUBSEQUENTLY, THE PR.CIT FOUND THAT A.O HAS FAILED TO CONDUCT APPROPRIATE ENQUIRIES RELEVANT TO THE ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 3 - ASSESSABLE INCOME AND THEREFORE OBSERVED THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE AND ISSUED THE NOTICE U/S 263 O F THE ACT TO THE ASSESSEE ON 30.01.2019. THE PR.CIT FINDS THAT ASSESSEE HAS PAID STAMP DUTY ON 07.05.2013 IN RESPECT OF SALE OF FLATS AND NOT ON 28.03.2013 AND THE AGGREGATE VALUE WHICH THE STAMP VALUATION AUTHORITY HAS ADOPTED IS RS.1,38,55,000/. - THE LD.AR OF THE ASSESSEE ATTENDED AND EXPLAINED TH E CASE. THE PR.CIT FOUND THAT AS PER THE ASSESSMENT RECORD, THE ASSESSEE HAS SOLD FLATS ON 07.05.2013 FOR RS.61,31,706/-AND REFLECTED IN THE PROFIT AND LOSS ACCOUNT. WHEREAS, THE STAMP VALUATION ADOPTED FOR SALE OF FLATS IS RS. 1,38,55,000/-AS PER THE REGIST ERED DEED DATED 07.05.2013.THE ASSESSEE HAS ADOPTED THE INCORRECT SALE VALUE IN THE BOOKS OF ACCOUNTS AND THEREFORE THE DIFFERENCE IN SALE VALUE HAS TO BE AD DED AS PER THE PROVISIONS OF SEC.43CA OF THE ACT. THE ASSESSEE HAS FILED REPLY IN THE COURSE OF REVISION ARY PROCEEDINGS EXPLAINING THAT THE FLATS WERE BOOKED I N THE FINANCIAL YEAR 2009-10 AND THE ALLOTMENTS WERE ISSUED IN THE F.Y 2010-11, THEREFORE, THE ASSESSEE HAS OFFERED THE INCOME FOR TAXATION IN THE F.Y 2012-13 ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 4 - RELEVANT TO A.Y 2013-14. DURING THE FINANCIAL YEAR 2013-14 ONLY AGREEMENTS WERE REGISTERED AND NO INCOME HAS BEEN EARNED BY THE ASSESSEE, SINCE THE BOOKINGS AND ALLOTMENT WERE OFFERED IN THE RELEVANT ASSESSMENT YEAR HENCE THE PROVISIONS OF SEC. 43CA OF THE ACT SHALL NOT BE APPLICABLE. WHEREAS, THE PR . CIT CONSIDERED THE FACTS, DEALT ON THE ISSUES, THE AIR INFORMATION AND THE PROVISIONS OF SEC. 43CA OF THE ACT AND OBSERVES THAT THE ORDER OF THE A.O IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PR.CIT FIND THAT THE APPLICATIONS FOR BOOKINGS OF F LATS FILED IN THE COURSE OF HEARING DOES NOT GIVE THE COMPLETE DETAILS OF THE SALE CONSIDERATION IN RESP ECT OF THE FLATS BOOKED. FURTHER, THE LD.PR.CIT FOUND THAT THE ASSESSEE HAS NOT PROVIDED COMPLETE DETAILS OF PAYMENTS AND THE PROVISIONS OF SEC. 43CA OF THE AC T ARE APPLICABLE FROM A.Y 2014-15 . THE ASSESSEE ALS O HAS FAILED TO PRODUCE ANY LETTER OF ALLOTMENT OF FL AT SPECIFYING THE AREA OF THE FLAT AND RELEVANT DETAIL S. THE PR. CIT OBSERVED THAT THAT THE A.O HAS NOT UNDERTAKEN ANY ENQUIRY IN RESPECT OF THE SALE CONSIDERATION OF THE FLATS AS CLAIMED BY THE ASSESS EE. THEREFORE, THE ORDER PASSED BY THE A.O IS ERRONEOUS ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 5 - AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE ORDER IS SET ASIDE. THE DISPUTED ISSUES ARE RESTORE D TO THE FILE OF THE A.O FOR EXAMINING THE VALUE OF THE FLATS AND EVIDENCES FILED AND TO CONDUCT THE ENQUIRY AND ORDER U/S 263 OF THE ACT WAS PASSED ON 18.03.2019. AGGRIEVED BY THE ORDER OF THE PR. CIT, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE HONBLE TRIBUNAL. 3. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE PR.CIT HAS ERRED IN CONSIDERING THE ORDER PASSED BY THE A.O AS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE IRRESPECTIVE OF THE FACT THAT THE ASSESSEE HAS PROVIDED THE COMPLETE DETAILS BEFORE THE A.O IN THE ASSESSMENT PROCEEDINGS. THE A.O ON VERIFICATION OF DETAILS HAS ACCEPTED THE R ETURN OF INCOME. THE LD. AR FURTHER REFERRED TO THE PAPER BOOK IN RESPECT OF APPLICATIONS MADE FOR THE ALLOTM ENT OF FLAT AND THE BANK STATEMENTS OF THE FIRM DISCLOS ING THE AMOUNT RECEIVED FROM THE APPLICANTS AND ALSO TH E AGREEMENT OF SALE AND SUBMITTED THAT THE A.O HAS MADE ENQUIRY AND TOOK A POSSIBLE VIEW, THEREFORE TH E PROVISIONS OF SEC.43CA OF THE ACT SHALL NOT BE APPLICABLE TO CURRENT YEAR AND THE ASSESSEE HAS DISCLOSED THE INCOME IN THE A.Y.2013-14 AND ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 6 - SUPPORTED HIS ARGUMENTS WITH JUDICIAL DECISIONS AND PAPER BOOK AND PRAYED FOR ALLOWING THE APPEAL. 4. CONTRA, THE LD. DR SUPPORTED THE ORDER OF THE PR . CIT AND SUBMITTED THAT THE PROVISIONS OF SEC. 43CA( 3) OF THE ACT ARE VERY MUCH APPLICABLE TO THE ASSESSE E AND PRAYED FOR DISMISSAL OF THE APPEAL. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED ISSUE IS WITH RESPECT TO REVISION ORDER PASSED BY T HE LD.PR.CIT AS THE A.O HAS NOT MADE ENQUIRIES ON THE SALE CONSIDERATION OF FLATS. THE LD.ARS CONTENTIONS ARE THAT THE PROVISIONS OF SEC43CA OF THE ACT ARE N OT APPLICABLE AS THE ASSESSEE FIRM HAS MADE THE BOOKINGS FOR FLATS IN THE YEAR 2010 AND RECEIVED T HE AMOUNTS OVER A PERIOD OF TIME. FINALLY THE FLATS WE RE REGISTERED AND INCOME HAS BEEN OFFERED IN THE ASSESSMENT YEAR 2013-14. THE LD. AR REFERRED TO THE APPLICATIONS IN RESPECT OF FLATS AT PAGE 10 TO 12 O F THE PAPER BOOK AND BANK STATEMENTS REFLECTING THE CREDI TS AT PAGE 16 OF THE PAPER BOOK,THE LD.AR FURTHER HIGHLIGHTED THAT THE STAMP DUTY WAS PAID AND FOR SOME REASONS THE AGREEMENTS COULD NOT BE REGISTERE D ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 7 - ON THAT PARTICULAR DATE AND FINALLY WERE REGISTER ED ON 07.06.2013. THE LD. AR ALSO REFERRED TO THE AGREEME NT OF SALE AT PAGE 50 OF THE PAPER BOOK WHICH WAS ENTERED ON 07.05.2013 IN RESPECT OF APPLICATIONS MA DE IN 2010-11. THE CONTENTIONS OF THE LD. AR THAT THE PROVISIONS OF SEC.43CA(3) SHALL NOT BE APPLICABLE T O THE CURRENT YEAR AND THE ASSESSEE HAS OFFERED THE INCOME ON THE FLATS IN THE EARLIER YEARS. THE OBSERVATIONS OF THE PR. CIT THAT THE A.O HAS NOT CONDUCTED ENQUIRIES IS DEVOID OF MERITS AS THE A.O HAS PASSED THE SCRUTINY ASSESSMENT ORDER AFTER VERIFYIN G THE DOCUMENTS AND INFORMATION FILED IN THE COURSE O F ASSESSMENT PROCEEDINGS. WHEREAS, THE LD.DR SUBMITTED THAT THE AGREEMENT O F SALE WAS ENTERED ON 07.05.2013 AND THE TRANSACTION FALLS IN THE A.Y 2014-15 THEREFORE THE PROVISIONS OF SEC 43CA OF THE ACT SHALL MANDATORILY APPLICABLE AND THE A.O. HAS NOT APPLIED HIS MIND. WE FIND ON PERUSAL OF THE FACTS AND THE MATERIAL PAPERS FILED, IN RESPECT OF THE APPLICATION REFERRE D BY THE LD.AR AT PAGE 8 TO 10, IT WAS ONLY MADE ON 26.03.2010 WITH THE DETAILS OF CHEQUES IN RESPECT OF ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 8 - THE FLATS. WE ALSO FIND THAT THE ASSESSEE HAS FILE D THE DETAILS REFERRED AT PAGE 4 TO 35 OF THE PAPER BOOK BEFORE THE A.O ON 14.12.2016 IN COMPLIANCE TO THE NOTICE ISSUED U/SEC142(1) OF THE ACT WHICH CANNOT BE DISPUTED. THE ASSESSEE HAS FILED THE REQUISITE DETA ILS IN RESPECT OF FLATS WHICH INCLUDES NAME OF FLAT OWN ER, DATE OF BOOKING, STAMP DUTY PAYMENT DATES, DATE OF REGISTRATION , AGREEMENT VALUE AND ALSO MARKET VALU E AS ON THE DATE OF REGISTRATION. FURTHER THE AGREEME NTS OF SALE REFERRED AT PAGE 36 TO 223 OF THE PAPER BOO K WERE FILED IN THE COURSE OF HEARING BEFORE THE A.O. ON PERUSAL OF THE ASSESSMENT ORDER AT PAGE 1 PARA 3 TH E ASSESSING OFFICER HAS MADE OBSERVATIONS THAT IN RESPECT OF THE PROJECTS, THE ASSESSES HAS FURNISHED THE RELEVANT DETAILS. THE REVENUE IS DISPUTING ON NON CONDUCT OF ENQUIRY, BUT WE FIND THE ASSESSEE FIRM HAS DISCHARGED ITS BURDEN OF PROOF ON SUBMITTING THE VITAL REQUISITE DETAILS CALLED FOR BY THE ASSESSING OFFICER BY ISSU E OF STATUTORY NOTICE U/SEC142(1) OF THE ACT ALONG WITH THE QUESTIONER WHICH CANNOT BE OVER LOOKED. SINCE THE INFORMATION WAS AVAILABLE WITH THE A.O IN THE COURS E OF THE ASSESSMENT, THE A.O. HAS CONSIDERED THE FAC TS, ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 9 - SUBMISSIONS AND EVIDENCES FILED AND TOOK A VIEW. I N THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS RESPONDED TO THE CLARIFICATIONS / QUIRES RAISED BY THE A.O. AND AFTER VERIFICATION AND SATISFACTION OF CLAIMS, THE ASSESSING OFFICER HAS PASSED THE ORDER U/SEC143(3) OF THE ACT. FURTHER, THE ASSESSEE FIRM HAS OFFERED INCOME ON T HE SALE TRANSACTIONS IN THE ASST YEAR 2013-14, AND THE SE FACTS ARE FILED BEFORE THE ASSESSING OFFICER AND WA S ACCEPTED BY THE REVENUE. THE PAYMENT OF STAMP DUTY AND INCOME ON FLATS WAS OFFERED IN AY 2013-14 BUT ONLY REGISTRATIONS HAPPENED ON 7/05/2013 WHICH FALL S IN THE ASST YEAR 2014-15, HENCE THERE IS NO LOSS OF REVENUE TO THE INCOME TAX DEPARTMENT AND THE PROVISIONS OF SEC 43CA OF THE ACT ARE NOT APPLICABL E. WE CONSIDERING THE FACTS, CIRCUMSTANCES AND THE PROVISIONS OF LAW ARE OF THE CONSIDERED VIEW THAT T HE ASSESSING OFFICER ORDER PASSED U/SEC143(3) OF THE A CT DOES NOT SATISFY THE TWIN CONDITIONS OF ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDIN GLY, THE REVISION ORDER PASSED BY THE LD.PR.CIT IS ITA NO .3582 /MUM/2019 M/S. ANANT ENTERPRISES, MUMBAI. - 10 - QUASHED AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.05.2021 SD/- SD/- (M BALAGANESH) (PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 03/05/2021 SK PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. ,-. //'( , '(# , & / DR, ITAT, MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER, , / //TRUE COPY// 1. / ( ASST. REGISTRAR) !' #, / ITAT, MUMBAI